Vietnam, U.S Sign Series of Agreements at Indo-Pacific Business Forum

6:42:16 PM | 29/10/2020

A series of agreements worth billions of US dollars between Vietnam and the United States were signed during the Indo-Pacific Business Forum on October 28-29 in Hanoi, cohosted by the Vietnam Chamber of Commerce and Industry (VCCI) and the American Chamber of Commerce (AmCham Vietnam).

1. U.S. Grains Council – Ministry of Industry and Trade Ethanol Memorandum of Understanding

The U.S. Grains Council (USGC) - Ministry of Industry and Trade (MOIT) Memorandum of Understanding (MOU) will further a strong partnership between the United States and Vietnam to expand the use and availability of ethanol in Vietnam. This MOU will help Vietnam meet its fuel needs in an environmentally and economically sustainable manner.

Ethanol is a clean fuel that is produced from corn and cassava, among a variety of other feed stocks. USGC has been working most recently with the Tung Lam Company - Vietnam’s only ethanol-producing company - to partially convert its cassava-based ethanol production facilities to corn-based production to improve the economic efficiency of its plants.

USGC thanks Vietnam for recognizing the importance of ethanol. Committing to working towards a national E10 blend rate will provide predictability that can lead to future financial and technical investments in the ethanol industry, while helping Vietnam meet its environmental goals. There is also potential for Vietnam to become the third largest market for U.S. ethanol exports, should Vietnam reach its goal of an E10 blend rate.

2. Bac Lieu LNG-to-power project 

Delta Offshore Energy, Bechtel Corporation, General Electric, and McDermott announced the Master Teaming Agreement for the development of the Bac Lieu LNG-to-power project for more than $3 billion of U.S. equipment and services. 

The Delta Offshore Energy Bac Lieu LNG-to-power project will bring 3,200 MW of power to Bac Lieu Province, and Vietnam, to help address the growing clean, reliable and competitive energy needs of the country and its rapidly growing economy. The purpose of the signing is to utilize $3 billion of equipment and engineering services from Bechtel, General Electric, and McDermott, utilizing the best-in-class American technology and engineering from the United States.  

The total project concession will be up to $50 billion over 25 years and is expected to import up to 3 MTPA of LNG. The project is the first private sector owned and operated LNG-to-power project approved in the national master power development plan as a 100% Foreign Direct Investment under Vietnam’s Law on Investment.

The Project is a flagship model for US-Vietnam bilateral relations on trade, investment and energy security and represents a new dawn for private sector-initiated investments in energy infrastructure in Vietnam.

3. Son My LNG Import Terminal Project 

The AES Corporation signed the term sheet of the joint venture agreement with the Petro Vietnam Gas Joint Stock Company for the development of the Son My LNG Import Terminal Project - a project with a total investment cost of US$1.4 billion.  This signing comes near the one-year anniversary of the historic agreement AES signed with the Vietnamese government to build the $1.8-billion Son My 2 combined cycle gas turbine (CCGT) power plant as witnessed by Commerce Secretary Ross.

The Son My LNG Import Terminal Project will be located in Binh Thuan province with the total capacity of up to 450 TBtu, to supply gas to newly built gas-fired power plants of about 4,500 MW, other existing gas-fired power plants, and industrial customers. Together, the 2.2 gigawatts power plant and terminal will play a major role in shaping Vietnam’s energy future by diversifying the energy mix with imported LNG as well as meeting the country’s increasing demand for sustainable and affordable electricity.

4. Long An LNG-to-power project

VinaCapital, in partnership with the Long An local authority, will cooperate to develop the Long An LNG-to-power project, providing 3,000 MW of power to Vietnam. To support this project, VinaCapital will collaborate with General Electric (GE) for the supply of GE gas turbines and associated equipment and services. The Long An power project, previously registered as a coal-fired power plant, was among the largest power projects in the South of Vietnam, and brings a promising solution to the impending power shortages facing the region while addressing key environmental impact concerns.

The project is of strategic importance as it will generate up to 8% of the nation’s energy needs when commissioned. It has a highly strategic location with direct access to country’s largest industrial zone and only 30km away from the country’s largest city with over 10 million inhabitants (Ho Chi Minh City).

5. ExxonMobil, Hai Phong City and JERA MoU for LNG-fueled Power Project

ExxonMobil Hai Phong Energy Pte Ltd, Hai Phong People’s Committee and Japan power
generation company (JERA) signed a MOU to work together on a potential integrated LNG to Power project in Hai Phong.

ExxonMobil has submitted a master plan application with a project concept for consideration and potential inclusion in Vietnam’s National Power Development Plan (PDP). Hai Phong City has submitted a letter of recommendation to include power demand with potential locations of power plants and LNG import infrastructure. The project submissions are pending government approvals.

LNG-fueled power in Hai Phong will provide a more environmentally friendly alternative to the currently proposed coal projects in the master plan.

6. U.S.- Vietnam Pork Consortium MoU between Vietnam Trade Alliance and the U.S. sellers’ group

This agreement will establish a commitment for a major Vietnamese processor and retailer to purchase U.S. chilled and frozen pork.

The Vietnam Trade Alliance (VTA), with significant U.S. ownership, representing a variety of Vietnamese buyers and producers, agrees to a 3-year program for the purchase US$300-500 million of U.S. chilled and frozen pork and pork products for further processing and distribution into the Vietnam market. This includes the establishment of an agreed supply chain, specified products, and price, as well as an import mechanism for asset management. 

For the next steps, VTA seeks the support of the Vietnamese Government to support the U.S.- Vietnam Pork Consortium as an example of fair trade between the two nations and as an effort to balance the trade deficit.  Consideration for preferred customs clearance and a reduction in import duty to zero percent under this program would ensure the program’s long-term growth and success. 

In addition, due to current challenges in Vietnam’s domestic production, this agreement will work to stabilize pork prices thereby helping Vietnamese consumers.

7. EVNNPT IT Roadmap 2.0 Technical Assistance

The U.S. Trade and Development Agency (USTDA) and the Vietnam National Power Transmission Corporation (EVNNPT) conducted Grant Signing for EVNNPT IT Roadmap 2.0 Technical Assistance valued at US$ 935,060.

USTDA approved funding for a roadmap that would allow Vietnam’s National Power Transmission Corporation to modernize its information technology, communications, and power transmission systems and enable future smart grid technology investments. USTDA’s first roadmap with NPT led to exports of American grid modernization technologies.

Nam Pham (Vietnam Business Forum)